Making Sense of Market Forecasts

Most prognosticators miss the mark—but there are ways you can profit from their predictions.

By

Jason Zweig

Updated Jan. 8, 2011 12:01 am ET

Every January, hordes of highly paid experts attempt to predict what the economy and the markets will do in the coming year. Later in the year, nearly all of the forecasts turn out to be wrong.

Here, we hope to offer something different: a blueprint for how to make practical use of these predictions, even when you suspect they are wrong. Taken together, forecasts can point toward the best and worst outcomes you can reasonably expect in a given year—and tell you how confident you should (or shouldn't) be.